NCUA Says 25% Cap From Single Originator Won't Be Part of Final Loan Participation Rule: Onsite Coverage
ALEXANDRIA, Va. — The NCUA has heard “loud and clear” that credit unions do not like a proposed loan participation cap that would limit credit unions from participating in loans, in the aggregate, in excess of 25% of their net worth from a single originator, Chairman Debbie Matz told attendees at the regulator’s second Listening Session Wednesday afternoon in Alexandria, Va.
As a result, the NCUA is planning to make changes to the final loan participation rule; in particular, the 25% limit, before issuing the final regulation, she said.
Matz did not say what the final cap would be.
The announcement came after a credit union executive in attendance told the chairman that limiting loan participations to 25% net worth would be damaging, because credit unions have invested a lot of time in building a core group to manage loan participations, and develop a synergy in the group.